Should a MassHealth Applicant Accept Help from the Nursing Home’s Lawyer to Appeal a MassHealth Denial?

Many nursing homes offer help to families who need to apply for MassHealth to help pay for the elder’s nursing home bills. In simple financial situations, that help is beneficial to both the elder and the nursing home. In more complicated situations, however, it can often make more sense to handle the process without involvement by the nursing home, especially if the nursing home’s lawyer is involved.

A member of the Massachusetts Chapter of the National Academy of Elder Law Attorneys recently reported via email on its listserv a cautionary tale about why a MassHealth applicant should not allow the nursing home’s lawyer to be directly involved in or take over the MassHealth application and appeal processes. In that case, an out-of-state law firm representing a Massachusetts nursing home is now suing an elderly nursing home resident and members of his family, and using information the law firm had gathered while supposedly helping the elder.

The elder had applied for MassHealth and was denied on the basis that $100,000 in caregiver contract payments were disqualifying transfers. The daughter (who is attorney-in-fact under the elder’s durable power of attorney) appealed and the hearing officer in February 2012 upheld the validity of the contract and approved the $60,000 of the payments that were rendered prior to the elder’s admission to the nursing home. The hearing officer decided that the remaining $40,000, which was paid after the nursing home stay had begun, was a disqualifying transfer, resulting in a MassHealth disqualification period of approximately 5 months.

The elder’s current lawyer reported: “Prior to the hearing date, the nursing home law firm had the elder assign his rights to the MassHealth benefits, to allow the firm access to his financial records and to cooperate with the law firm to secure MassHealth benefits. The law firm stated that, although they were not representing the elder, the firm would handle the administrative appeal on his behalf.”

The elder’s current lawyer also noted: “MassHealth’s lawyers refused to respond to the firm’s request for documents. MassHealth stated in its appeal memo that they felt the attorney was fishing for information that he could then use to sue the elder! The hearing officer refused to allow the attorney to participate in the fair hearing because the firm hadn’t filed the necessary paperwork.”

It seems to me that after the partial victory at the fair hearing, a competent elder law attorney representing the elder then would have explained to the family (1) that it would be a steep uphill battle to appeal a factual decision to Superior Court, (2) how a “cure” works in the MassHealth application process, (3) who would have potential personal liability for the elder’s unpaid nursing home bills, and (4) that a return of $40,000 to the elder within 60 days would have resolved the MassHealth problem. It does not appear that the law firm representing the nursing home did any of these things.

The elder’s current lawyer also reported: “Within 30 days of the decision, the nursing home lawyer filed a 30A appeal in Superior Court, purportedly acting on behalf of my client under the assignment of rights. They did not notify the client that they had done so. They also filed a hardship waiver appeal administratively on behalf of the nursing home. Again, the client was not informed. Then in March, with both cases pending, the nursing home law firm filed a lawsuit against the elder and his kids in Superior Court, alleging that the caregiver contract payment was a fraudulent transfer, a breach of the nursing home admission contract, and a breach of fiduciary duty. The suit neglected to mention the valid caregiver contract or the favorable appeal decision. The nursing home filed an emergency motion for an injunction requiring the kids to turn over the entire $100,000 they earned under the contract.”

Obviously, the family has had to hire a lawyer to defend against the nursing home lawyer’s questionable tactics. The “free” help offered by the nursing home on the fair hearing appeal process has now resulted in family members incurring the cost of a lawyer to defend themselves personally against the nursing home’s lawsuit.

The elder’s current lawyer concluded: “The law firm essentially tried to bully the client into paying them the entire $100,000, when they have no claim to the $60,000 that was a non-disqualifying transfer and a tenuous claim on the $40,000. … Bottom line, this is a case which highlights how clients need to be on their guard when the nursing home offers to assist them.”